KUALA LUMPUR, March 16 — PKR president Datuk Seri Anwar Ibrahim today warned that the prospects of a recession for Malaysia are increasingly likely in the face of the global Covid-19 outbreak, urging the federal government to introduce measures to help Malaysians including by increasing cash aid to the poor.
Anwar, who is a former deputy prime minister and also former finance minister, said there was an urgent need for the government to take bold steps to further stimulate the economy and provide a strong social safety net for those bound to be affected the most.
“A recession is no longer just a distant possibility but increasingly it is more probable. It is imperative that we focus efforts on helping those who will be harmed the most by a recession — namely the already poor and marginalised,” he said in a press statement today.
Anwar said the economic stimulus package to tackle Covid-19 was finalised by then finance minister Lim Guan Eng and announced by the federal government before the second wave of Covid-19, noting that these initiatives now need a further extension to ensure that businesses, especially small and medium enterprises (SMEs), are able to weather the crisis.
Anwar said the solution was to provide cash aid, saying that “evidence indicates that the most efficient method to maintain social welfare during this type of economic disruption is via direct cash transfers.
“Building on the measures in the existing stimulus, the Ministry of Finance should increase Bantuan Sara Hidup (BSH) payment for May 2020 and consider additional one-off cash payments for all BSH-eligible households.
“Also I encourage making employment insurance available for employees forced to go on unpaid leave, focusing on sectors directly impacted by Covid-19,” he said.
Anwar also proposed various other measures, including the exemption of the Sales and Services Tax (SST) for all sectors until June 2020 and to directly affected sectors for the whole of 2020; incentives or grants to small and medium retail and food and beverage businesses to use e-commerce and delivery systems; cash flow assistance for SMEs impacted by supply chain disruptions; and banks to offer loan forbearance to low-income households coping with late mortgage payments.
“All the signs point to a recession similar to the 1997 Asian Financial Crisis, which I helped manage as the then finance minister. Urgent and difficult decisions need to be made decisively by the government of the day,” he said, urging the prime minister to stop focusing on his coalition’s political manoeuverings and instead devote full attention to the crisis at hand.